Source｜Shenrancaijing (ID: shenrancaijing)
Author｜Zhou Jifeng, editor｜Jin Yunpi
Title map｜Education together official map
Together Education, which is in the second echelon of online education, was listed on the Nasdaq on December 4th. It is ahead of VIPKID, homework help, and ape tutoring in the first echelon.
It is introduced in the prospectus of Yiedu Education that, in terms of the number of enrollments and total bills of paid courses in 2019 and the first half of 2020, Yiedu Education has become the top five online K12 tutoring organization in China.
On the day of listing, as the investors behind, Wang Qiang, partner of ZhenFund, and Lei Jun, CEO of Xiaomi, all attended the ringing of the bell.
Lei Jun also sighed: 8 years ago, online education was still in the stage of ground promotion, and education together was ready for three to five years of death. Eight years have passed, and finally the harvest season has arrived. On the together education platform, there are more than 20 million students from more than 300 cities across the country to study together every month, which is an amazing number.
But in the face of stories and figures, capital did not buy it very much. On the day of listing, after a slight increase of 6% at the opening, the share price of Yicheng Education began to decline slightly. As of the close, it was reported to 10.57 US dollars per share, a slight increase of 0.67%, and the market value was 2.252 billion US dollars.
In fact, Yi Education, which has been listed, is still facing industry problems such as year-round losses and burning money to win customers. In the future, it needs performance and real data to prove itself.
01. Free on campus, cash out off campus
Liu Chang, CEO of Yiedu Education, said at the listing site that there were many setbacks in the past entrepreneurial process, and there were also so-called dark moments.
From the entrepreneurial experience of education together, this is true.
In 2013, with the rise of the online education industry, online tool products also gradually emerged. These products are mostly cut from operating scenarios, and the models are divided into to B and to C categories. The market competition is fierce and the homogeneity phenomenon is serious.
Ape counseling, homework help, etc. are all from thisFortune, the one-stop education established in 2011, but compared to other companies, its advantage is that it is mainly for teachers, and the scene is a one-stop solution for teachers’ online lesson preparation and homework assignment.
Source / Pexels
The cost of acquiring lessons with simple tools is high, and how to realize it has always been a difficult problem for all companies on this track. The current learning apps rely more on tool products to form a user pool, accumulate data and traffic, and then provide value-added services.
Together Education has gone through many explorations in the monetization model, tried O2O platform, one-on-one foreign teachers, etc., and finally figured out the path is to first enter the public school through free question bank and tool products , Accumulate the resources of parents and students, and then realize it through K12 online classes.
The most terrible thing is that in 2019, the “Notice on Prohibiting Harmful Apps from Entering Primary and Secondary Schools” issued by the General Office of the Ministry of Education requires all localities to take effective measures to resolutely prevent harmful apps from entering primary and secondary schools. Under a paper order, B2G2C encountered obstacles, learning APP companies began to face life and death choices, choose to compete for C-end or continue to enter public schools?
Liu Chang once stated at the 2019 annual meeting that the strategy of education together is to “stick to the school and be big outside the school”, clarifying that it is free inside the school and monetized outside the school.
Judging from the prospectus, through such a model, together education has broken a blood path: providing teaching, learning and evaluation applications for more than 900,000 teachers, 54.3 million students, and 45.2 million parents nationwide. Currently serving 70,000 nationwide Schools, covering one-third of the country’s public primary and secondary schools; and the number of enrollments in paid courses has also increased rapidly, from 272,000 in 2018 to 726,000 in 2019, an increase of 166.9%.
02. Industry issues, none of them are left
Nowadays, together education has public school apps “Together Primary School”, “Together Middle School”, family-oriented “Together Learning”, and K12 online online school “Together Learning Online School”. Among them, the online school is responsible for the specific realization, and the remaining products are responsible for the accumulation of data resources and drainage.
The prospectus shows that Yi Education achieved revenue of 310 million yuan, 406 million yuan, and 807 million yuan in 2018, 2019, and the first nine months of 2020, respectively.
Among them, K12 online tutoring has almost become the main source of revenue for education. In 2018, 2019, and the first nine months of 2020, the revenue was 93.883 million, 360 million, and 751 million, respectively. The proportions of are 30.2%, 88.5% and 93.0%.
Drawing / Deep Burning
As for the many problems encountered in the online education industry, all of them cannot be avoided by educating together.
The first is continuous loss, and the magnitude of the loss is increasing year by year. Yitong Education lost 656 million yuan, 963 million yuan, and 974 million yuan in 2018, 2019, and the first nine months of 2020, respectively, and lost 2.593 billion yuan in less than three years.
Similarly, marketing costs are high. Nowadays, the overall market prospect of online education is not clear. Most of the companies in the depths need to burn money to win customers, and even start a marketing war. Education is also inevitably involved, and marketing expenses are rising. The marketing expenses in 2018, 2019 and the first nine months of 2020 will be 303 million yuan, 583 million yuan, and 850 million yuan respectively. Each year’s marketing expenses far exceed revenue, and it is difficult not to lose money.
In fact, according to its prospectus, for 2019 andIn terms of enrollment of paid courses and total bills in the first half of 2020, Yi Education has become the top five online K12 tutoring institutions in China. Now it has been successfully listed, and together with the education to get the financing ticket in advance.
But going public is not an umbrella for online education companies.
In the field of K12 large class, education together is relatively late, so there is no advantage in the fierce competition track. Compared with the first echelon players who also focus on K12 online large classes, the scale is very different.
In terms of revenue, the 2019 revenue of Yitong Education is equivalent to 20% of GSX’s revenue (2.115 billion yuan), and its revenue in the first nine months of 2020 is equivalent to GSX’s revenue in the same period (49.14 100 million yuan) 16%.
In terms of the number of payees, GSX paid 1.147 million regular-priced courses in the third quarter of this year, while the number of payers in the first nine months of the education together was 1.168 million. In other words, GSX learns for a quarter The number of payers is equivalent to the number of payers for three quarters of education.
In addition, the entire online education is facing the difficulty of large-scale profitability. Even GSX, the only institution in the industry that achieved large-scale profitability, suffered a substantial loss in its latest quarterly earnings, and its stock price fell by 30%.
“In addition to high growth, employers now also value whether there are better customer acquisition models and unit economic models, and whether future profits can be expected.” An investor said.
But nowadays, the net cash flow of educational business activities is negative all year round, the cost of acquiring customers is high, and it is far from running through its own model, and the profit is far away.
After the listing, it is still unknown whether the performance can win the hearts of investors.